by Andreas Exarheas|RigZone.com| A fact sheet posted on the White House website on Tuesday stated that U.S. President Donald J. Trump signed a National Security Presidential Memorandum (NSPM) “restoring maximum pressure on the government of the Islamic Republic of Iran”.
“The NSPM directs the Secretary of the Treasury to impose maximum economic pressure on the Government of Iran, including by sanctioning or imposing enforcement mechanisms on those acting in violation of existing sanctions,” the fact sheet noted.
“The Secretary of State will also modify or rescind existing sanctions waivers and cooperate with the Secretary of Treasury to implement a campaign aimed at driving Iran’s oil exports to zero,” it went on to state.
Rigzone has contacted Iran’s ministry of foreign affairs for comment on the fact sheet. At the time of writing, the ministry has not yet responded to Rigzone’s request.
In a report sent to Rigzone by the Skandinaviska Enskilda Banken AB (SEB) team on Wednesday morning, Bjarne Schieldrop, the chief commodities analyst at the company, said Brent “turned higher yesterday as Trump ramps up pressure on Iran” but added that it was “slightly lower this morning”.
“Brent traded as low as $74.15 per barrel (-2.4 percent) yesterday but managed to close with a gain of 0.3 percent at $76.2 per barrel,” Schieldrop highlighted in the report.
“The almost linear downward trend since the recent peak in mid-January seems to have faded a bit with price action now a little more sideways it seems,” he added.
In the report, Schieldrop pointed out that, on Tuesday, “Trump signed actions for harder pressure on Iran with the potential to drive its exports significantly lower”.
“That Trump would try to drive Iranian oil exports lower has been our expectation all along,” he said in the report.
“The oil market is now caught between increasing fears that an escalating trade war will damage global oil demand growth on the one hand and possible sudden disruption of Iranian oil exports,” he continued.
Schieldrop stated in the report that “Trump tariff chaos and trade war is no good for global growth and oil demand growth”, adding that “business investments and consumer spending will likely fall in the face of these highly erratic and growth negative actions”.
“The oil bears naturally crawl out in response,” he said.
“But supply disruptions, as so often before, can then rapidly and suddenly turn everything around,” he added.
Schieldrop also highlighted in the report that longer dated Brent prices “offer good buy-in value … At least in a three-year backward-looking perspective”.
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“Longer dated prices are pushed down towards the low points over the past three years and offer good buying opportunity for oil consumers in a backward-looking perspective,” he noted.
“However, how … is [it] all going to pan out in the end: Trump trade war damaging global growth, driving the oil price lower, or Trump disrupting Iranian oil exports, driving the oil price higher. Or both, but with the effect that oil price continues sideways,” he went on to state.
Rigzone has contacted the Trump transition team, the White House, and the Iranian ministry of foreign affairs for comment on the SEB report. At the time of writing, none of the above have responded to Rigzone yet.
According to OPEC’s website, Iran’s crude oil production averaged 2.859 million barrels per day in 2023. Iran’s crude oil exports averaged 1.323 million barrels per day and its exports of petroleum products averaged 408,000 barrels per day, in 2023, the site showed. The country’s value of petroleum exports hit $41.129 billion in 2023, according to OPEC’s site. Iran is a founding member of OPEC, the site highlights.
To contact the author, email andreas.exarheas@rigzone.com
